On Tuesday, Senate Republicans floated the idea of reimposing the state portion of the sales tax on unprepared food as a possible solution to the structural tax imbalance that currently exists with the state’s General Fund.
“We should be looking at all solutions,” said Sen. Daniel Hemmert, R-Orem. “Reinstating the sales tax on food would do the same thing dollar-wise that we were trying to do with the tax reform bill.”
Legislators are struggling to deal with a sales tax base that is growing slower than it needs to in order to fund the operations of state government, leading to a structural imbalance that required the transfer of money out of the Education Fund to fund other state operations. Legislators were planning on imposing sales taxes on services to grow that tax base while dropping the overall rate in exchange. Lawmakers shelved that plan last week and instead will study options for fixing the problem following the 2019 session.
“If you’re looking at just plain dollars, it does the same thing (as the tax overhaul bill), but it doesn’t solve the long-term problem,” said Hemmert.
If lawmakers were to reinstate the sales tax on unprepared food, some estimates say it could generate more than $200 million in sales tax revenue annually. But, that increased tax burden would fall primarily on poorer Utahns, who would pay a disproportionately larger part of their income on for the tax.
Should GOP legislators look to re-imposing the sales tax on unprepared food, they would be doing so against the will of Utahns – putting them in a very bad light.
Back in January, UtahPolicy.com had pollster Dan Jones & Associates ask this very question: Should the food tax be put back on as part of the overall sales tax reform plan?
DJA found support for reforming the sales tax.
But little support for putting the sales tax back on unprepared food:
- 67 percent of all Utahns “strongly” or “somewhat” oppose putting the state sales tax back on food.
- Only 26 percent favored the new tax.
- And 7 percent didn’t know.
What is interesting is that Republicans and conservatives BOTH strongly oppose re-instating the food tax:
- Republicans are against it, 68-24 percent.
- Those who said they are “very conservative” politically oppose putting the sales tax back on food, 72-23 percent.
- Democrats oppose re-instating the food tax, 61-32 percent.
- Political independents oppose putting back on the food tax, 70-25 percent.
- Those who said they are “very active” in The Church of Jesus Christ of Latter-day Saints don’t want the sales tax back on food, 69 percent oppose the tax coming back on, 25 percent support taxing food.